Luck rather than a conspiracy explains why the newspaper that broke the expenses scandal is the property of billionaire recluses, who prefer holing up in a Channel island fortress to paying the same taxes as the rest of us.

The Observer would have run the story if we had been offered it, as would most other newspapers. As it happened, the exposé went to the Telegraph owned by Sir David and Sir Frederick Barclay, who received knighthoods from the British state even though they live in a castle on Brecqhou, an islet off the tax haven of Sark.

Typically for British press barons – or I suppose I should say Sarkian press barons – they are happy to use England's oppressive libel laws to limit the freedom of other papers to criticise them. Publicity-shy though they may be, they deserve examination because by a fluke of circumstance they are at the centre of the political crisis, and for reasons I will get to, the economic crisis as well.

Rahm Emanuel, chief-of-staff for the then president-elect Barack Obama, wrote himself into the dictionary of quotations when he said after the fall of Lehman Brothers: "You don't ever want a crisis to go to waste." Obama destroyed his friend's radical hopes when he appointed as head of his National Economic Council, Larry Summers, a Clinton-era relic, who had destroyed the Glass-Steagall Act, the most effective bank regulation America has seen. Democratic Washington is now swarming with financial lobbyists, who are simultaneously determined to take public money and prevent public accountability.

At least the US authorities have arrested a few financiers. In Labour Britain, the only people in power who will suffer alongside the hundreds of thousands who have lost their jobs, and the millions who have seen their pensions and savings slashed, will be MPs who engaged in petty fiddles and small-time property speculation.

I am not defending them, simply pointing out that the nation's focus on the abuses of parliamentarians has been extraordinarily useful to David and Frederick Barclay and their kind. A year ago, the world seemed willing to tackle the secrecy of the tax havens that hid so many of the bubble's catastrophic deals. All we have ended up with is tinkering. The OECD's recent Tax Information Exchange Agreements do nothing to identify the beneficial owners of trusts and companies run through the Channel Islands, Caribbean, Monaco and Lichtenstein. As Richard Murphy of Tax Research UK says, they provide the illusion of reform rather than the real thing.

They are not alone in that. Mervyn King, once regarded as an establishment man, is arguing for a British Glass-Steagall Act to protect public money by separating high street banks from the casino operations of investment banks. Instead of seizing the chance for change, Gordon Brown and Alistair Darling – who are Labour politicians, in case you have forgotten – are fighting him all the way.

I accept that the most significant ideological switch of the past 20 years lies behind the spectacle of the governor of the Bank England outflanking a Labour prime minister and chancellor on the left. The capture of Labour by the City neutralised the only political force in Britain that might have saved the country from the worst depredations of the crash by regulating the banks.

But the Barclay brothers' scoop also explains why former social democrats still cannot confront the City even after it has wrecked the economy. The expenses scandal has emasculated public life. Despised and humiliated politicians feel that they cannot fight any tough cause or vested interest. A prominent Conservative told me that he might want to argue for more immigration because he knows that Britain needs young, skilled workers. He won't because he realises that as soon as he opens his mouth, the airwaves will fill with raging voters shouting that he only wants cheap foreign servants to clean out the droppings from his duck island or dredge his moat.

If even at this late date, Labour ministers were to take on the City, they would hear those same raging voters telling them that they had no right to act because they were just as bad as the bankers. David Cameron knows that the chorus is waiting to shout at him and is preparing the ground for the inevitable public spending cuts by promising to reduce ministerial salaries on taking office and freeze them for the duration of the next parliament.

It is a good effort, but I suspect it will take more than a 5% pay cut for the Tories to escape the allegation that they are imposing suffering on the masses while lining their own pockets.

If you think I am being too kind to the political elite, and that no punishment is too great for MPs, look at Sir Christopher Kelly's proposed reforms. They will not produce an improved Parliament better able to scrutinise the executive. On the contrary, his demand that MPs living within an hour of Westminster should schlep off back to their constituencies rather than stay in the Commons will inevitably make the task of opposition MPs from outer London and the Home Counties harder.

But then Sir Christopher is a former permanent secretary at the Department of Health. On his watch in 1998, the NHS launched a ruinously expensive and disastrously inefficient IT strategy, Information for Health and hospitals saw a surge in the numbers of deaths from MRSA.

Again for coincidental rather than conspiratorial reasons, retired Whitehall mandarins such as Sir Christopher are not interested in helping MPs expose the faults of the bureaucracy they once presided over.

Accountants talk of "opportunity cost", the loss we suffer when we choose one course rather than another. The price we are paying for the denunciations of Parliament is that Sir David and Sir Frederick Barclay will continue to enjoy tax-exempt status, the bonus boys of the City will be left free to return to the casino tables and MPs will be too busy collecting receipts to hold Sir Christopher Kelly's successors to account.

We are in the middle of the best crisis of our lifetime and we are letting it go to waste.